SEC Warns of Unregistered Fitness Gym Investment Scams

On October 31, 2025, the Securities and Exchange Commission (SEC) issued a warning to the public about the proliferation of investment offers related to setting up fitness gyms. According to the SEC, these offers are being presented as franchise agreements, co-franchisee agreements, partnership agreements, co-ownership contracts, and other forms of contracts that promise investors an opportunity to earn profits through income sharing.

The SEC explained that the companies behind these fitness gym investment schemes typically offer investors a percentage of shares in the company or in a specific branch. Alternatively, they may propose partnership agreements where the gym will be co-owned by several individuals, or co-franchisee contracts where a single fitness gym will be franchised and owned by multiple co-franchisees.

The investors are often told that they just need to place their money, sign the contract, and then wait for the monthly or quarterly distribution of profits. Some of these schemes even claim to offer a guaranteed profit, stating that any losses will be shouldered by the company through their contingency funds.

The SEC has cautioned that such contracts are considered securities under the law, and any public solicitation of these unregistered securities is illegal. The commission also warned that anyone acting as a salesman, broker, dealer, or agent in convincing people to invest in these schemes may face criminal liability.